February 22, 2024


Delighting finance buffs

Exporters facing 50{b1ee4ac4d8d7b8e1af61a560a11ca52574b8103b547ccac8037ce0cdf9e7ba58} order cancellations, seek Rs 30,000 crore relief from Modi govt

With demand drying up in key markets such as the United States and United Kingdom because of the global crisis caused by the coronavirus pandemic, Indian exporters strapped with dwindling sales have written to Prime Minister Modi, seeking intervention.

As cash reserves dry up along with order books, the Federation of Indian Exporters has written to the Prime Minister.

Indian exporters’ body, the Federation of Indian Exporters, in a letter to the Prime Minister have said that the sector that employs millions of Indians is facing over 50 per cent cancellations in orders. The worst affected industries are leather, carpets, handicrafts, apparels where nearly 75 per cent of orders have been cancelled.

Such massive cancellations will impact India’s current account deficit as foreign inflows slide. The exporters are seeking a package of Rs 30,000 crore to cover for working capital expenses which includes salaries, wages, rent and electricity charges.

The exporters have also sought easier lending from banks with collateral free loans. They have also sought that repayments be relaxed to 18 equal instalments and an extension of the moratorium from 3 months to 6 months.

The federation has also requested maximum salary eligibility to be reduced to Rs 15,000 to enable export organizations to take advantage of the Provident Fund Scheme announced by the government wherein the government will pay the employers’ share.

Countries like China have stepped in to provide support to the exporters. China has provided 3 per cent additional export tax rebate on exports in March, 2020.

The group has urged the PM to prod the RBI into implementing the relief measures announced on March 27.

They have also sought reduction in GST rates to nearly half for hotels, aviation, travel and tour operators for a year. Time-bound refund of GST, duty drawback in the next 15 days to ease up compliance and free capital are the core demands they have made.

The government so far has announced two stimulus packages, including the Rs 1.7 lakh crore relief package; ease in compliance norms and measures by the RBI that free up about Rs 4 lakh crore of liquidity, however, the government is yet to come out with fiscal measures to support businesses.

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